Best Stocks for Credit Spreads: 10 High-IV Picks
Ten credit-spread candidates ranked by IV rank, screened for the option volume that keeps a four-legged exit from costing more than the credit.
The Short Answer
Credit spreads want two things that often conflict: implied volatility rich enough to make the credit worth the risk, and options liquid enough that you can close the position without surrendering the profit to the bid-ask spread. A wide spread on an illiquid name quietly eats the edge that made the trade look good.
This screen ranks by IV rank — where current implied volatility sits within the name's own 52-week range — because that is the measure that tells you whether you are being paid above or below this stock's normal rate. It then requires real option volume, which is the part most high-IV screens skip and the part that decides whether your exit fill is acceptable.
ApexVol screens 399 optionable names for this list, requiring a $5+ share price and 1,000+ contracts of average daily option volume before ranking. Ranked by IV rank (percentile of current 30-day IV within its own 1-year range). Universe filtered to names above $5 with at least 1,000 contracts of average daily option volume, so both legs can be closed at a reasonable price.
30-day IV at 51% against a 20-day realised of 55%. Averages 46K contracts a day, so the short leg closes without a fight.
30-day IV at 52% against a 20-day realised of 32%. Averages 38K contracts a day, so the short leg closes without a fight.
30-day IV at 86% against a 20-day realised of 36%. Averages 17K contracts a day, so the short leg closes without a fight.
30-day IV at 92% against a 20-day realised of 82%. Averages 10K contracts a day, so the short leg closes without a fight.
30-day IV at 67% against a 20-day realised of 61%. Averages 367K contracts a day, so the short leg closes without a fight.
30-day IV at 70% against a 20-day realised of 69%. Averages 9K contracts a day, so the short leg closes without a fight.
How We Ranked These Strategies
Ranked by IV rank (percentile of current 30-day IV within its own 1-year range). Universe filtered to names above $5 with at least 1,000 contracts of average daily option volume, so both legs can be closed at a reasonable price.
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Frequently Asked Questions
What IV rank is high enough to sell a credit spread?
Most premium sellers want IV rank above 30, and prefer above 50. Below that you are taking defined-risk exposure for a credit that does not compensate for it. The number matters less than the direction: selling into the upper half of a name's own volatility range is the structural edge, not a specific threshold.
Why does option volume matter more for spreads than single options?
Because you pay the spread twice on entry and twice on exit — four crossings instead of two. On an illiquid name a $0.10 wide market on each leg can cost $40 per contract round trip, which is a meaningful share of a typical $100-150 credit. Liquidity is not a nicety here, it is part of the expectancy.
Put credit spread or call credit spread?
Put credit spreads are bullish-to-neutral and benefit from the volatility skew, which prices downside puts richer than equivalent upside calls. Call credit spreads are bearish-to-neutral and collect less for the same delta. Most of the structural premium in equity options sits on the put side.
How does this screen differ from a plain high-IV list?
A plain high-IV list ranks by absolute implied volatility, which just surfaces the same permanently-volatile small caps every month. Ranking by IV rank asks a better question — is this name expensive relative to itself right now — and the liquidity filter removes the names you could not trade out of anyway.
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